Ahead of the release of Betfair’s Full Year 2015 financial performance results this Wednesday, Betfair CFO Alex Gersh gave in-depth insight to financial auditing business publication Financial Director on the operator’s turnaround since its 2012 corporate restructure.
Gersh detailed to Financial Director how Betfair’s newly established executive team under CEO Breon Corcoran had transformed Betfair from its post 2011 IPO decline into a ‘profitable beast’. Gersh detailed key governance-led restructuring decisions that were undertaken in 2012, and provided further insight into the operator’s growth strategy.
Gersh, who joined Betfair in 2012 from interactive payment systems provider NDS (Cisco), outlined how Betfair had to streamline costs in order to initiate the turnaround of the operator, who at the time had been labelled one of the worst performing major tech flotations.
Noting that ‘costs of the business were not right’, Gersh and the new Betfair executive team saved £30 million by taking ‘700 people out of the business’. To Gersh’s surprise the move did not hinder company morale, but instead elevated performance as “people realised that they mattered, and that they had a direct line to me, Breon or Mark Brooker”.
Furthermore the CFO noted that Betfair’s turnaround had been aided by a change in corporate culture, which he notes as one of the executive teams biggest challenges as it had to change the operator from being “very process-oriented to very action-oriented”.
Since the beginning of its 2012 turnaround, Gresh highlighted that Betfair has turned into a much “leaner and focused” company, which in turn has conveyed increased investor and market confidence.
In terms of performance strategy, Gersh has installed key metrics for Betfair to measure spend and resource efficiency, outlining effective marketing activities and operational processes as vital cogs for the operators performance.
Looking forward, Gresh noted that Betfair’s future growth will likely depend on whether the operator can expand its winning business model into newly liberalised markets.